Satellite radio giant Sirius XM has invested $75 million in SoundCloud, the music streaming and distribution platform known for its popularity among new artists.
"What it's being used for is to invest in our products, services, and also look at strategic opportunities in the music market." Michael Weissman, president of SoundCloud, told Cheddar.
For SoundCloud, where artists such as Post Malone, DJ Khaled, and Billie Eilish first got their start, that means continuing to build the 13-year-old platform's penchant for discovery.
"SoundCloud is the place where artists first upload their music," Weissman said. "It's where they find their first fans. It's also where discerning music listeners come to find artists themselves. So everything that we're doing is focused on that emerging music artist."
The investment comes after a few years of quiet for the Berlin-based company. The company laid off 173 employees and closed offices in San Francisco and London as part of a series of cost-cutting measures that were designed to ensure its long-term sustainability.
Around the same time, talks of an acquisition by Twitter or Spotify also fell through. This left SoundCloud in a position to hunker down and focus on its fundamentals.
Weissman said that today he does not see the company as being in direct competition with Spotify, Apple Music, or other music streaming services.
"The other services offer more or less a $10 a month subscription to access the same catalogue of music," he said. "We're really about that artist-to-fan connection."
SoundCloud, for instance, is the only music service to allow comments on songs, which allows for a dialogue between listener and musician.
"It's much more of a social experience of music than simply accessing music," Weissman said.
The platform has about 200 million tracks available, compared to Spotify's 50 million songs. That includes DJ sets, live music, mash-ups, remixes, and original songs.
In addition to an editorial team that is constantly trawling for hidden gems, Weissman said SoundCloud is developing algorithms to help guide users through the vast catalogue.
Prior to the investment, SoundCloud had started to bounce back. The company reported breaking $200 million in revenue for the first time in 2019 after years of operating losses.
Sirius XM came to invest in SoundCloud by way of Pandora, a Sirius XM subsidiary. SoundCloud and Pandora entered a partnership a year ago to sell their ad inventory as one product. Together they reach about 100 million monthly active listeners.
"SoundCloud's unique platform serves a vital role in today's music ecosystem where new artists are discovered and build their fan base, and established artists experiment and connect directly with their fans in highly effective ways," said Jim Meyer, CEO of SiriusXM, in a release.